European leaders gather in Brussels

The heads of state for the member nations of the European Union have arrived in Brussels to begin a two-day summit that will focus on issues surrounding the Euro crisis. It is the 4th summit this year.

Investors are not holding out much hope that the summit will deliver firm results. Top of the meeting’s agenda are the controversial plans over the Eurozone forming a closer banking union, the Spanish bailout situation and of course Greece.

Plans for a banking union have met opposition from non Euro members including the United Kingdom. Germany also remains hesitant about committing to such a deal that would lead to the European Central Bank effectively taking control of Eurozone nations budgets. Yesterday it was revealed that German finance Minister Wolfgang Schäuble is backing the creation of a super-commissioner to oversee member nation’s budgets. No doubt he would want such a person to be German, something that other countries would not be happy about.

Other points of contention are the methods in hot to balance austerity measures against growth has already split opinion and then there is closer currency union and the impact of a Spanish bailout.

Financial expert Tom Vosa of National Australia Bank said: “What we want to find out is, given the IMF has given everybody a nod and a wink to end austerity, do we see comments about the need for a medium-term fiscal framework and perhaps some sign that policy will be loosened in France, in Germany, in the Netherlands – core Europe, growing Europe. If they can perhaps ease fiscal policy, then the euro zone as a whole might grow a little better in 2013.”

The wider economic issues will be joined by the big question of whether or not Madrid will formally request a bailout, perhaps needing the European Central Bank to step in and buy Spanish government bonds. In Greece the country has come to a virtual standstill as the nation holds its 20th national strike since the start of the country’s economic crisis.

“Just once, the government ought to reject the troika’s absurd demands, “Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite,” said Yannis Panagopoulos, head of the GSEE private sector union, one of two major unions that represent about 2 million people, or half of Greece’s workforce.

With no substantial decisions expected the markets have become cautious over the Euro. It solid news is revealed then we can expect the Euro to surge but if it turns out to be another case of empty talk and promises the currency is likely to weaken.

As of 10.31 pm:

The Pound to Euro exchange rate is currently trading at 1.2316

The Pound to US Dollar exchange rate is currently trading at 1.6163

The Pound to Australian Dollar exchange rate is currently trading at 1.5525

The Euro to US Dollar exchange rate is currently trading at 1.3124

The Euro to Pound exchange rate is currently trading at 0.8118

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